Harihar Pradhan, Khurda V. ITO, Khurda Ward, Khurda

ITA 462/CTK/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7235 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 18-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 17-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Keywords: Principle of natural justice; Reasonable cause; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.462/CTK/2013 ASSESSMENT YEAR : 2009 - 2010 HARIHAR PRADHAN, AT: GOPINATHPUR, PO: GAMBHARIMUNDA, DIST: KHURDA. VS. ITO, KHURDA, WARD, KHURDA PAN/GIR NO. AHXPP 6226 B (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 1 8 /01/ 2017 DATE OF PRONOUNCEMENT : 18 /01/ 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - II, BHUBAENSWAR, DATED 18.6.2013 , FOR THE ASSESSMENT YEAR 2009 - 2010 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT THE ORDERS OF THE FORUMS BELOW ARE ILLEGAL, EXCESSIVE AND UNJUST IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND DUE TO ADDITION OF ENTIRE ALLEGED AMOUNT IN EXCESS FOUND IN THE FORM 26AS OVER AND ABOVE THE PAYMENT MADE IN FORM 16A CAUSED ILLEGALITI ES IN THE MATTER, HENCE SHOULD BE DELETED IN TO TO. THE ORDERS ARE TO BE QUASHED AND DELETED. 3 ITA NO.462/CTK/2013 ASSESSMENT YEAR : 2009 - 2010 ASSESS EE . THE APPEAL WAS FINALLY ADJOURNED TO 18.1.2017, WHEN ALSO NONE APPEARED ON BEHALF OF THE ASSESSEE. NOTICE DATED 23.12.16 FIXING THE DATE OF HEARING OF THE APPEAL ON 18.1.2017 THROUGH RPAD, HAS BEEN SERVED ON THE ASSESSEE ON 9.1.2017 AS EVIDENCED FROM THE ACKNOWLEDGEMENT CARD, PLACED ON RECORD. THEREFORE, THE APPEAL WAS HEARD EXPARTE QUA THE ASSESSEE AND DISPOSED OF THE SAME AFTER CONSIDERING THE SUBMISSION OF LD D.R. AND ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. 4. LD D.R. RELIED ON THE ORDER OF LD CIT(A). 5. I FIND THAT THE LD CIT(A) HAS ADJUDICATED AND DECIDED THE GROUNDS OF APPEAL AS UNDER: .. 2.1. ASSESSMENT RECORDS WERE REQUISITIONED ON 24.05.2013 AND ON RECEIPT OF THE SAME IT WAS CAREFULLY EXAMINED. 3. FIRST OF ALL, IT IS UNDISPUTED THAT THE NOTICE U/S.148 WAS DULY SERVED ON THE APPELLANT ON 10.01.2012. THEREAFTER, SRI B. SAHU, ADVOCATE HAD APPEARED BEFORE THE AO FOR THE REOPENED PROCEEDINGS. HE HAD ALSO FILED WRITTEN SUBMISSION ALONG WITH AUDITED REPORT. THE AO HAS STATED THAT HE HAD ISSUED TWO ELABORATE LETTERS ON 09.07.2012 AND 01.11.2012. ALTHOUGH I DID NOT LOCATE ANY CONCRETE ACKNOWLEDGEMENT FOR THE FIRST LETTER, THE SECOND LETTER WHICH HAD REFERRED TO THE FIRST LETTER AND WAS ADDRESSED TO THE LAST KNOWN ADDRESS OF THE APPELLANT AT GOPINATHPUR, PO: GAMBARIMUNDA, KHURDA WAS RECEIVED AT THIS ADD R ESS BY ONE SRI BISWAJIT PRADHAN. SINCE IT IS SETTLED LAW THAT IF POSTAL AUTHORITIES DELIVER A LETTER MEANT FOR A PERSON AT HIS LAST KNOWN ADDRESS AND A NOTHER PERSON AVAILABLE AT THAT ADDRESS RECEIVES IT ON BEHALF OF THE ADDRESSEE, IT SHOULD BE CONSTRUED A VALID SERVICE, I HOLD THAT PRINCIPLE OF NATURAL JUSTICE IS SATISFIED IN THIS CASE. NOT ONLY THE AR OF THE APPELLANT HAD APPEARED BEFORE THE AO, THE APP ELLANT IS DEEMED TO HAVE FULL KNOWLEDGE REGARDING THE QUESTIONS RAISED BY THE AO. IN ABSENCE OF PROPER COMPLIANCE TO THE SHOW - CAUSE LETTERS, THE EXPARTE ASSESSMENT IS VALID. 4. IT IS CLEAR FROM THE ASSESSMENT ORDER THAT THE APPELLANT WAS A CONTRACTOR AND WAS MOSTLY UNDERTAKING LABOUR INTENSIVE CONTRACT JOBS. IN THE RETURN, THE APPELLANT HAD DISCLOSED GROSS CONTRACT RECEIPTS OF RS.80,95,554/ - AND HAD CLAIMED TDS OF RS.98,520/ - . ON VERIFICATION OF FORM 26AS THE AO FOUND THAT THE GROSS CONTRACT RECEIPTS ACTU ALLY AMOUNTED TO RS.1,12,03,537/ - AND THE APPELLANT HAD SUPPRESSED CONTRACT RECEIPTS. 5 ITA NO.462/CTK/2013 ASSESSMENT YEAR : 2009 - 2010 ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO ADOPT THE G.P. RATE DECLARED BY THE ASSESSEE FOR THE YEAR OF ASSESSMENT. THAT IN THE CASE OF R.R. CARRY ING CORPORATION - VRS - A.C.I.T, IN ITA NO.179 (CTK) OF 2009, HORIBLE CUTTACK BENCH HELD THAT IN CASE OF DIFFERENCE BETWEEN THE ASSESSEE'S BOOKS AND AS PER TDS CERTIFICATE, THEN ON THE SAID DIFFERENCE, THE ONLY EMBEDDED PORTION OF PROFITS IS TO BE TAKEN IN TO CONSIDERATION. THEREFORE IT WAS DIRECTED TO LEARNED A.O. TO ADOPT THE G.P. RATE DECLARED BY THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THAT AS THE APPELLANT COULD NOT BE ABLE TO COLLECT ALL THE T.D.S. CERTIFICATES, NATURALLY THE DIFFERENCE DETECTED BETWEEN 26 AS STATEMENT AND ASSESSEE'S BOOK. THE MISTAKE WAS NOT DELIBERATE. WHEN THE ERROR CAME TO THE NOTICE TO APPELLANT HAD ALREADY GIVEN WRITTEN EXPLANATION OFFERING PROPOSAL TO PAY TAX ON PROFIT AS DISCLOSED IN THE RELEVANT ASSESSMENT YEAR. IN CASE OF MALAFIDE INTENTION THE APPELLANT COULD HAVE DISCLOSE THE TDS AMOUNT AT RS. 1,43,1751 - INSTEAD OF RS.98,520/ - . SO YOUR HONOUR MAY CONSIDER TH E CASE IN THE INTEREST OF JUSTICE. THAT HON'BLE SUPREME COURT'S OBSERVATION IN THE CASE OF DILIP N.SHROFF - THE APPEX COURT IN THE CASE OF DILIP N. SHROFF - VRS - C.I.T. (2007) 161 TAXMAN 221 HELD THAT A PENALTY UNDER SECTION 271 (1) (C) MAY BE IMPOSED ONLY I F IT IS PROVED THAT THE ASSESSEE HAS CONSCIOUSLY MADE THE CONCEALMENT OR FURNISHED INACCURATE PARTICULARS OF HIS INCOME. SO IN THIS CASE THE INITIATION OF PENALTY U/S.271 (1) (C) MAY BE DROPPED. THAT THE APPELLANT COULD NOT BE ABLE TO APPEAR BEFORE THE IT O ON 9.7.2012 AND ON 1,11.2012 AS AT THAT TIME THE APPELLANT WAS UNDER UNDER MEDICAL TREATMENT AND ALSO HE HAS NOT RECEIVED NOTICE, WHICH DOES NOT LEAD TOWARDS IMPOSITION OF PENALTY U/S.271 (1) (B) OF THE ACT. IF THE ASSESSEE FAILS TO COMPLY WITH A NOTICE UIS. 142 (1) OR 143 (2) OR DIRECTIONS U/S.142 (2A), THE ONUS IS ON HIM TO SHOW THAT THERE WAS A REASONABLE CAUSE FOR NONCOMPLIANCE. THE ABSENCE OR PRESENCE OF MENSREA IS NOT RELEVANT. IN THE CONTEXT OF THE WORDING OF SECTION 271(1)(B), IT HAS BEEN HELD THA T THE WORD 'MAY' MUST BE HELD TO BE MANDATORY (1986) 160 I.T.R. 613 (PATNA) STANDARD MERCANTILE CO. UNDER THESE CIRCUMSTANCES IT IS PRAYED TO KINDLY CONSIDER THE CASE SYMPATHETICALLY, KEEPING VIEW OVER THE ABOVE JUDICIAL PRONOUNCEMENTS AND MAY DELETE THE DEMAND FOR WHICH ACT I SHALL BE OBLIGED ENOUGH.' 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT. IT IS PERTINENT TO NOTE THAT IN HIS ORDER AT PARA - 2(II) THE AO HAS WRITTEN THE FOLLOWING: 'HOWEVER, HIS OFFER WAS REJECTED ON THE GROUND THA T HIS CASE HAS BEEN AUDITED BY PROFESSIONAL A UDITOR AND WHATEVER BOOKS OF ACCOUNTS MAINTAINED BY HIM HAS BEEN DULY AUDITED TAKING INTO ACCOUNT ALL HIS RECEIPTS AND EXPENSES DURING THE YEAR. IT IS NOT THE CASE OF THE ASSESSE TO PRAY FOR ESTIMATION OF HIS IN COME AFTER THE DUE PROCESS OF AUDIT IS OVER. HIS PLEA BECOMES IRRELEVANT WHEN CERTAIN EXTRA UNDISCLOSED RECEIPT IS DETECTED BY THE ASSESSING OFFICER.' 7. ON AN OVERALL CONSIDERATION OF THE FACTS OF THE CASE, I AM INCLINED TO ACCEPT THE AOS VERSION. THERE HAVE BEEN MANY DECISIONS AT VARIOUS LEVELS OF JUDICIAL FORUM STATING THAT IN CASE OF DETECTION OF SUPPRESSED SALES/CONTRACT RECEIPTS, IT WOULD NOT BE FAIR TO TREAT THE ENTIRE AMOUNT AS PROFIT BECAUSE I.T. ACT DOES NOT PROVIDE TAXATION OF SALES/CONTRA CT RECEIPTS. THE AO HAS A DUTY TO FIND ONLY THE PROFIT ELEMENT IN SUCH 7 ITA NO.462/CTK/2013 ASSESSMENT YEAR : 2009 - 2010 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCE D IN THE OPEN COURT ON 1 8 / 01/2017 . S D/ - (N.S.SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 18 /01 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : HARIHAR PRADHAN, AT: GOPINATHPUR, PO: GAMBHARIMUNDA, DIST: KHURDA. 2. THE RESPONDENT : ITO, KHURDA, WARD, KHURDA 3. THE CIT(A) - II, BHUBANESWAR. 4. CIT, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//